Economic Freedom Can End Recession

You hear it everyday on the news:  Obama wants to reign in Wall Street, big banks, and executive pay.  Claims are made that Wall Street, Fannie and Freddie, and insurance giant AIG are to blame for the Great Recession.  All this finger pointing by the White House and Democrats in Congress makes you wonder how they are just now coming to this realization?

Everyone knows that the government has oversight on large companies through the Sarbanes-Oxley Act, a bill that was pushed through after shady accounting and investing practices managed to fraud employees and investors in companies like Enron, Tyco International and Worldcom.  These companies fudged their financial reports, leading to the inevitable fallout of their market share, and a host of investors were left with empty pockets.  The SOX Act makes company managers personally certify their disclosure of their financials, holding them civilly and criminally liable in the event that fraud or artificial inflation should occur.  Some still debate over its positive effects.

SOX was meant to instill investor and consumer confidence after a shaky mini-crash in late 2001.  But does it do what it purports to do?  Some say yes.  If so, then why must we have a Wall Street Reform bill?  How has Wall Street strayed so far from the successes of SOX in so little time?  Most would agree, they haven't.  Wall Street makes everyone money, even people who don't own any stock.  Wall Street is the purest form of capitalism we have.  Market value is based on supply, demand, reputation and consumer confidence.  The Street has made millionaires out of many and led to the American dream for at least half of retirees.  People see the value in risk.

Still, Obama and his minions in Congress seek to tighten their grip on big business, instead of allowing the free market to work.  America will deal with whatever new rules and regulations are placed on it, and the American people will always find a way to flourish.  We lead the world in innovation, technology, banking, and developing natural resources.  We are a nation of go-getters, a culture of creating something out of nothing, and above all else, aficionados of freedom.  Freedom not free for everybody.

The government is as much if not more to blame for the Great Recession.  After all most people agree that if you had to narrow down the cause to a singular cause, you would blame Fannie Mae and Freddie Mac:  organizations that were forced to make bad home loans to people who couldn't afford it, all in the name of free for everyone, not freedom.  The American Enterprise Institute for Public Policy Research describes the perfect storm of government involvement in Fannie and Freddie as:

"The government mission required them to keep mortgage interest rates low and to increase their support for affordable housing. Their shareholder ownership, however, required them to fight increases in their capital requirements and regulation that would raise their costs and reduce their risk-taking and profitability. But there were two other parties--Congress and the taxpayers--that also had a stake in the choices that Fannie and Freddie made. Congress got some benefits in the form of political support from the GSEs' ability to hold down mortgage rates, but it garnered even more political benefits from GSE support for affordable housing. The taxpayers got highly attenuated benefits from both affordable housing and lower mortgage rates but ultimately faced enormous liabilities associated with GSE risk-taking."


How can we trust Obama and Congress with the reform of Wall Street, when its clear that their involvement with mortgage giants Fannie and Freddie was a big cause of the collapse in the first place?


Granted there are some cases where government wasn't involved and natural bankruptcy occurred (Lehman Brothers).  However where government stayed out of the picture and allowed private enterprise and the free market take over, those companies began flourishing much more rapidly again after being bought by larger companies, ridding themselves of toxic assets, and creating new business models.  A free marketplace does that; Americans do that; when we're knocked down we get back on the horse that bucked us.  That's what we do.  Every entity that the government has bailed out has seen a slower recovery than those who were bought out or reconditioned through private enterprise.  


Think about it.  Do we really want further economic constraints on the number one money making aspect of our economy, Wall Street?  Or do we want to let those guys do what they do best, make us money?  You decide.